For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Broken Hill Prospecting Limited’s (ASX:BPL) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. Check out our latest analysis for Broken Hill Prospecting
Commentary On BPL’s Past Performance
I look at data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend enables me to assess different companies on a similar basis, using the most relevant data points. For Broken Hill Prospecting, its most recent earnings (trailing twelve month) is -AU$1.02M, which, in comparison to last year’s figure, has become more negative. Given that these figures may be relatively nearsighted, I’ve estimated an annualized five-year figure for BPL’s net income, which stands at -AU$736.33K. This doesn’t look much better, since earnings seem to have steadily been getting more and more negative over time.
We can further evaluate Broken Hill Prospecting’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Broken Hill Prospecting’s top-line has grown by 15.32% on average, implying that the company is in a high-growth period with expenses racing ahead revenues, leading to annual losses. Eyeballing growth from a sector-level, the Australian metals and mining industry has been growing, albeit, at a muted single-digit rate of 8.07% over the previous twelve months, and a substantial 13.69% over the past five. This shows that any uplift the industry is profiting from, Broken Hill Prospecting has not been able to reap as much as its average peer.
What does this mean?
Broken Hill Prospecting’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always difficult to envisage what will happen in the future and when. The most useful step is to examine company-specific issues Broken Hill Prospecting may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Broken Hill Prospecting to get a more holistic view of the stock by looking at:
- 1. Financial Health: Is BPL’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- 2. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.